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Struggling emerging economies to double bond issuance in 2020

Central banks become buyers of last resort after coronavirus spooks investors

An employee counts Indonesia's rupiah bank notes at a currency exchange office in Jakarta on March 19.   © Reuters

TOKYO -- Emerging countries are set to issue as much as $3 trillion in new government bonds this year, nearly double the 2019 total, with central bank support that risks increasing these economies' reliance on institutions that are at least nominally independent.

Government spending in these countries is surging amid a scramble to shore up coronavirus-battered economies. The International Monetary Fund projects that the overall fiscal deficit of 40 emerging-market countries, including China, will swell to 10.6% of gross domestic product this year from 4.9% in 2019.

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